The SaaS Podcast - AI, Growth & Product-Market Fit for SaaS Founders

SaaS Acquisition: 18 Deals to a $60M ARR Portfolio

May 23, 2024

Tim Schumacher, co-founder of saas.group, discusses scaling bootstrapped SaaS via acquisitions, their portfolio of 18 companies, acquisition strategy, building a sellable business, and exploring climate action in tech.

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Episode notes

Introduction

00:00 • 4min

Scaling Bootstrapped SaaS via Acquisitions

03:33 • 2min

Entrepreneur's Journey: From CEDO to Scaling SaaS Projects

05:18 • 3min

SaaS Group Acquisition Strategy and Criteria

08:14 • 22min

Building a Sellable Business through Acquisitions and Growth

29:56 • 10min

Exploring Climate Action and Sustainability in Tech

39:47 • 3min

Tim Schumacher has completed 18 SaaS acquisition deals, building a portfolio that generates over $60M in ARR across 300 employees in 33 countries. Most targets are bootstrapped SaaS companies valued between 2x and 3x ARR.

Learn what SaaS acquisition buyers actually look for, how earn-out structures push acquisition valuation multiples higher, and why reducing founder-dependency is the most important step before selling a SaaS business.

🔑 Key Lessons

🏢 SaaS acquisition targets need $1M-$10M ARR: saas.group focuses on bootstrapped businesses in this range because they have proven product-market fit without VC dependency.
💰 SaaS acquisition valuations hinge on earn-out structure: Most deals close at 2-3x ARR, but founders who stay two to three years can push SaaS exit multiples significantly higher.
🎯 Reduce founder-dependency to increase SaaS acquisition value: The biggest red flag for selling a SaaS business is a company that cannot function without its founder. Grooming a successor raises acquisition valuation.
🤝 Founder-friendly SaaS acquisition preserves what works: saas.group keeps company names, cultures, and autonomy intact, offering centralized marketing and HR only when teams request them.
🛠️ Prepare your data room before any SaaS acquisition conversation: Having organized financials and proper IP assignments signals a well-run business and speeds due diligence for a smoother SaaS exit.

Chapters

Introduction
What saas.group does and who it serves
Revenue, growth rate, and global team
Tim's journey from Sedo.com to saas.group
Deep dive into SaaS acquisition criteria
Target company size and business model
Cultural fit and values in SaaS acquisition
Bootstrapped vs VC-backed acquisition targets
How saas.group sources SaaS acquisition deals
Post-acquisition support and autonomy
The SaaS acquisition process step by step
Term sheets as handshake agreements
Acquisition valuation multiples and deal structuring
What founder-friendly SaaS acquisition means
Challenges founders face during SaaS exit transition
Future plans and growth targets
Advice for building a sellable SaaS business
Why founders should examine their motivation to sell
Lightning round

Resources

Full show notes: https://saasclub.io/398
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